High Arctic Energy Services Inc.
TSX : HWO

High Arctic Energy Services Inc.

October 27, 2005 08:53 ET

High Arctic Investment in Norwegian Manufacturer Secures Rig Supply

RED DEER, ALBERTA--(CCNMatthews - Oct. 27, 2005) - High Arctic Energy Services Trust (TSX:HWO.UN) (the "Trust") today announced that it has purchased an interest in EDM/Sense, a leading Norwegian designer and manufacturer of drilling and well-service equipment.

The transaction, which closed on October 14, 2005, has the Trust exercising its option to purchase 10 per cent of the outstanding shares of EDM/Sense, for a total cost of 16.5 million kroner, or approximately $3.0 million Canadian. EDM Engineering & Drilling Machinery AS and Sense Technology, both based in Norway, have operated as privately held, independent companies and have merged upon closing of the transaction.

High Arctic is financing the purchase from its cash reserves with an expected positive contribution to future cash flows as the business of the combined entity EDM/Sense unfolds. High Arctic currently uses EDM/Sense equipment in its operations and has an exclusive licence for use of that company's patented drilling technology.

"We are pleased to be strengthening our relationship with EDM/Sense. The new company combines their respective strengths and the transaction is good for High Arctic in at least two ways. First, the investment is attractive based on the current assets and financial position of the new company alone. Second, in an extremely competitive market, we are now in a position to ensure our access to the some of the most technically advanced equipment available," said Jed Wood, President and CEO of High Arctic.

The transaction follows up on High Arctic's recently announced agreement to purchase a total of 15 additional 250K Combination Drilling, Work over and Snubbing (CDWS) rigs from EDM/Sense, which manufactures the main working components of the rigs. Five rigs are currently under construction, with completed delivery scheduled for March 2006. An additional 10 rigs are scheduled for delivery between July 2006 and May 2007.

About High Arctic

The Trust, through its subsidiaries, is a global provider of under balanced well construction services, including drilling, completion, work over operations and integrated project management. High Arctic's new under balanced drilling technology and equipment is recognized for its ability to improve oil and gas production capabilities and is expected to develop greater acceptance in international markets. Based in Red Deer, High Arctic has domestic operations in Alberta, British Columbia and the Northwest Territories. International operations are currently active in the Middle East and former Soviet Republics.

Forward-Looking Statements

This press release may contain forward-looking statements relating to expected future events and financial and operating results of the Trust that involve risks and uncertainties. Actual results may differ materially from management expectations as projected in such forward-looking statements for a variety of reasons, including market and general economic conditions and the risks and uncertainties detailed in the Trust's prospectus filed with the Canadian securities regulatory authorities. Due to the potential impact of these factors, the Trust disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.


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